As airlines post big profits, small communities lose service

A C-130 rusts away on the tarmac at the Visalia Municipal Airport. Commercial airlines service has been cut to three small airports in central California in the past four years. Visalia Municipal Airport lost service in 2016. (Tomas Ovalle / For The Times)

For 35 years, Transfer Flow Inc. has been manufacturing after-market fuel tanks for pickup trucks out of Chico, Calif., which means employees must make regular trips from the quiet college town to meet with clients and potential business partners.

That has become especially difficult since regular commercial air service ended at Chico Municipal Airport in 2014. Now company representatives have to drive as much as four hours round trip when they need to catch a flight out of Sacramento International Airport to meet clients from Ford, Nissan and other carmakers.

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"What hurts us the most is that it's stunting our growth a bit," said Ben Winter, Transfer Flow's director of business development. "Having a connection to the outside world is a real must."

Chico, with a population of 92,000, is one of 20 small communities in the U.S. to lose regular commercial air service in the last four years, according to data from the Regional Airline Assn., a trade group of carriers that serve mostly smaller airports. In California, commercial flights ended to three cities — Chico, Modesto and Visalia — more than in any other state.

At 91 other small airports nationwide, the number of departures has been cut by at least half in that same period, including Yuma International Airport in Arizona, Barnstable Municipal Airport in Hyannis, Mass., and Branson Airport in Missouri, the data show.

Enterprise Rent-A-Car has taken over the Visalia Municipal Airport terminal and rents cars and trucks from the facility. (Tomas Ovalle / For The Times)

"As airports lose frequency and destinations, communities experience diminished connectivity, which weakens their link to the global economy," said Faye Malarkey Black, president of the Regional Airline Assn.

The closures grew out of lessons learned by the airline industry during tough financial years capped by the last recession.

Airlines began merging and tightening operations, which led to reducing or eliminating service to many small communities that rely on turboprop planes carrying as few as 50 passengers. Instead, airlines have invested in the more profitable strategy of adding big planes, packed with cramped seats, to routes connecting big-city airports.

"When you are Southwest, why come to Visalia when you can fly out of Burbank and get a lot more business there," said Mario Cifuentes, deputy city manager of Visalia, which lost all commercial air service in 2016 when the city's lone airline, SeaPort Airlines, filed for bankruptcy.

Such route decisions have played a role in U.S. airlines' run of near-record profits, as have increasing travel demand, low fuel prices and strong revenue from passenger fees for checked luggage, food, drinks and entertainment.

In fact, so many airline executives at a 2015 trade group meeting promised to stay "disciplined" about adding flights so as not to hurt profits that lawmaker outrage, a federal antitrust investigation and a flurry of consumer lawsuits resulted.

Industry representatives concede that some small communities have lost service during the last few years but have repeatedly denied any collusion to reduce flights and boost prices.

The Regional Airline Assn. said a factor in the service reductions is a nationwide pilot shortage, which developed after a 2013 federal law requiring extra training and new tests for pilots who want to fly commercial jets. A 2009 crash of Colgan Air near Buffalo, N.Y., prompted the new rules, including requirements that pilots get more rest between shifts.

The group has called on the Federal Aviation Administration to address the pilot shortage by recognizing existing aviation courses to meet the new pilot training requirements and provide more financial support for aspiring pilots.

Most of the small communities that have lost service in the last four years are in the West and Midwest, with California, Montana, Washington and Wyoming taking the biggest hits.

In California, business leaders in Visalia, Chico and Modesto say the loss of regular commercial air service has made it more difficult to connect with outside companies to form partnerships and expand.

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A FedEx plane taxis on the runway adjacent to Highway 99 at the Visalia Municipal Airport. (Tomas Ovalle / For The Times)

The small Central California agricultural town of Modesto has one of the highest unemployment rates in the state. Its farms were hit hard by the state's four-year drought.

The city's municipal airport lost its regularly scheduled commercial flights when SkyWest Airlines pulled out in 2014, forcing locals who want to fly to drive 90 miles south to catch a flight out of Fresno or 92 miles west to San Francisco.

Since then, the community of 212,000 residents has tried repeatedly to persuade other carriers to serve Modesto, hoping that regular service might help attract new companies to put down roots in the town, said Cecil Russell, the chief executive of the city's chamber of commerce.

"We've been looking for something to uplift us and attract large companies to come here," he said.

Dan Gonzales, founder and president of Fifth Sun, a clothing manufacturer in Chico, said the cut in airline service to his city has also put him at a disadvantage over his competitors.

"An airport is kind of our lifeline to other areas of the state and other areas of the nation," he said, adding that he believes he lost a recent business partnership deal with Amazon because of his remote location and lack of air service in Chico.

Some business leaders say they have adjusted to the cut in air service.

"It's one of those things we've done without and we are resigned that it may not come back again," said Gail Zurek, president of the chamber of commerce in Visalia, where regular commercial service ended in 2016. She noted that many of Visalia's large agricultural companies either rent or own private jets to fly out of the city's airport.

To fill the transportation gap, the city of Visalia launched a shuttle bus service in 2015 that connects Visalia to Fresno-Yosemite International Airport for $10 each way. The trip takes about an hour.

A federal program called Essential Air Service, launched after the airline industry was deregulated in 1978, provides subsidies to airlines that serve small community airports. By agreeing to stop applying for the subsidies for 10 years, Visalia qualified for a $3.7-million grant to make airport improvements, Cifuentes said.

A trade group that represents the country's biggest carriers says economic trends are making it feasible to add service in the future.

"Airlines have restructured agreements with their regional partners to be more economical and, thanks to improving profits, airlines have been able to purchase and take delivery of new, more efficient aircraft," said Alison McAfee, an Airlines for America spokeswoman.

United Airlines recently announced plans to expand service, starting in June, to several small communities such as Eureka, Calif., Appleton, Wis., and Akron, Ohio.

During a recent conference call with analysts, United Airlines President Scott Kirby said the carrier hopes to draw travelers from major airline hubs and smaller airports such as Des Moines.

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"And winning your share in Des Moines is not about carrying people from Des Moines to Chicago, it's about carrying people from Des Moines to the world," he said.

Industry analyst Seth Kaplan, managing partner at Airline Weekly, said the United Airlines announcement may signal a turnaround for small communities.

"It's still tough to be a small airport," he said, "but there are actually signs of hope."

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UPDATES:

11:30 a.m.: This article was updated to clarify that when Ben Winter of Transfer Flow said company representatives spend as much as four hours driving when they must catch a flight out of Sacramento International Airport, he was referring to a round-trip drive rather than a one-way trip to the airport.